High excise duty is consistent
with the Constitution
Beata Brojewska
Legal Counsel BHS Law Firm

T

he Excise Tax Act providing for a high
excise duty for oil dealers, who have
failed to comply with the obligation
to draw up and submit to the tax authorities a monthly compilation of
the oil buyers’ statements, is in accordance
with the Constitution.
The provisions of the Act of 6 December
2008 on excise duty in article 89 paragraph 16
introduce penalty excise duty rate in heating
oils trade if conditions are not met for being
eligible to benefit from the preferential rate.
In accordance with article 89 paragraph 14
of the Act, one of the conditions for being eligible to benefit from the excise duty reduced
rate is for the oil vendor to draw up a monthly
compilation of purchasers’ statements about
oil being used for heating purposes and filing
it with the tax authorities until the 25th day
of the month following the month of the sale.
The Excise Tax Act sets out in detail the formal
requirements that the statement should meet.
A failure to do so entails negative consequences in the form of application of a burdensome excise tax rate.
The provision under article 89 paragraph
16 of the Excise Tax Act has aroused many
doubts both in trading energy products and
in terms of jurisprudence, including its constitutionality.
Among the allegations against the constitutionality of the penalty excise duty rate is
the non-compliance with article 2 of the Polish Constitution that stipulates the prohibition of undue interference by the legislature.
Moreover, according to some constitutionalists, the size of penalties is disproportionate
to the objective to be achieved through the
performance of the obligation to submit the
required documentation to the tax authorities.

40 :: polish market :: 3 /2014

On February 11, 2014 the Constitutional
Court settled that article 89 paragraph 16 of
the Excise Tax Act - insofar as it imposes application of the excise duty penalty rate, referred to in article 89 paragraph 4 whereof,
for a fuel oil vendor being in breach of the
obligation to draw up and submit to the tax
authorities a monthly compilation of buyers’
statements - is consistent with the Constitution of the Polish Republic.

“The Constitutional Court

stressed that the high rate
of excise duty is logically
linked to the purpose it
serves, which is to regulate oil trading safety and
reliability. The relaxation
of exemption eligibility requirements would
undermine the control
mechanism to an extent
difficult to estimate.”

The judgment of the Constitutional Court
is an answer to a legal question asked by the
Regional Administrative Court in Wrocław
regarding the lawfulness of the application
of the excise duty’s penalty rate in the light
of the constitutional norms.
The Constitutional Court found that the
rigor of the application of excise duty preferential rates in heating oil trade is aimed at
ensuring effective control of oil marketing
and diminishing the ill practice of using oil

contrary to its intended purpose. It is therefore a necessary and effective element of an
oil trading control system, which results in
reducing tax frauds related to its sale.
The Constitutional Court stressed that the
high rate of excise duty is logically linked to
the purpose it serves, which is to regulate oil
trading safety and reliability. The relaxation
of exemption eligibility requirements would
undermine the control mechanism to an extent difficult to estimate.
According to the Constitutional Court, it
is also clear that the obligation to provide the
authorities with a monthly compilation of
statements, although tedious, is not in itself
an excessive discomfort for heating oil dealers.
The Constitutional Court’s judgment is
impactful for excise goods trade, because it
solves the existing practical and predicative
doubts as regards the application of preferential excise rates.
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